Raffles Consulting Services
A family office incapacity drill tests whether personal, company and investment authorities work, then tracks exceptions to verified closure.
A family office incapacity drill should test whether the right people can act across personal affairs, companies, trusts, funds, banks and investment committees. Therefore, the drill is complete only when exceptions are recorded, assigned and verified after remediation.
However, do not simulate medical incapacity as a theatrical exercise. Instead, use a controlled records-and-authority test with a clear scenario, limited personal data and no live transaction unless separately approved.
Set the family office incapacity drill scope
Define the unavailable principal, assumed duration and decisions that cannot wait. Examples include payroll, household support, investment settlement, a capital call, insurance renewal, tax payment or board approval.
Next, list every legal person and account affected. Personal assets, a family company, a trust, a VCC and an advisory company may each have a different authority route.
Finally, set exclusions so the drill does not expose confidential health information or trigger a real bank, trustee or regulatory action by mistake.
Start with the personal authority record
The Office of the Public Guardian LPA information explains that a donor can appoint donees to make personal welfare and property and affairs decisions if mental capacity is lost, within the instrument’s scope.
Then, confirm that the LPA exists, is registered, remains usable and names available donees. Record whether decisions are joint, joint and several, restricted or subject to conditions.
Nevertheless, an LPA does not automatically give the donee authority over every company, trust, fund or committee. Keep that boundary visible throughout the drill.
Test each entity’s own authority
For companies, read the constitution, board composition, delegations, reserved matters and bank mandates. The ACRA guide on directors’ duties is a reminder that directors owe duties to the company and must exercise their own judgment.
Similarly, for trusts, identify the trustee, protector or other office holder and the powers actually granted by the trust documents. For funds, check the manager, directors, administrator, custody and investment-committee authority.
Therefore, do not infer authority from family seniority or job title. The drill should produce the document or verified provider confirmation that supports the action.
Check whether evidence can be retrieved promptly
Ask the authorised person to locate the current LPA information, resolutions, registers, trust records, fund documents, mandates, insurance contacts and adviser details. Test the secure index, not just one long-serving employee’s memory.
In addition, verify that originals or certified copies can be produced where a bank, court, trustee or other institution may require them. Record the location without copying sensitive documents into the drill report.
Afterwards, test access for a backup person. A complete folder that only the unavailable principal can open has failed.
Run decision paths without moving money
Select two or three urgent decisions and ask the team to identify the legal decision-maker, evidence, approver, adviser and execution party. Use a draft instruction marked as a simulation.
For example, for a payment, test who can approve, whether the mandate is current and who receives alerts. For an investment decision, test quorum, delegation, conflicts and the source of current portfolio data.
However, stop before sending a live instruction. The purpose is to test readiness, not to prove that staff can bypass ordinary controls.
Record exceptions precisely
An exception should state the failed task, affected entity, evidence observed, consequence and temporary control. Avoid vague entries such as documents need updating.
Next, classify the cause: missing legal authority, stale record, unavailable person, access failure, provider requirement, inconsistent document or unclear procedure. The remedy depends on the cause.
Consequently, rank urgency by the time within which a real decision would be needed and the harm caused by delay.
Use a remediation register
| Register field | What to record | Closure test |
|---|---|---|
| Exception | Failed task and entity | Clear factual description |
| Authority | Missing or inconsistent power | Updated legal evidence |
| Access | Record, system or provider block | Backup retrieval succeeds |
| Owner | Responsible person and adviser | Accepted responsibility |
| Deadline | Risk-based completion date | Evidence received on time |
| Retest | Exact affected path | Independent readback passes |
Separate legal work from operational correction
Some gaps can be corrected by updating an index, contact tree or access right. Others require a new LPA, deed, constitution change, appointment, board resolution or court application.
The Mental Capacity Act 2008 provides the governing framework for personal capacity and deputyship. Where legal authority or a formal opinion is required, coordinate with Singapore lawyers in the relevant private-client, trust, corporate or funds speciality.
Do not let an operations team rewrite legal documents or represent that an interim workaround transfers authority.
Verify remediation rather than accepting an update
Ask for the signed or registered document, provider acknowledgement, updated mandate, access readback or completed retest that proves the exception is closed. A message saying done is not evidence.
Preserve the original exception, remediation evidence, reviewer and closure date. If the fix creates a new dependency, add it to the next drill scope.
Report unresolved high-risk items to the appropriate board, trustee, family council or governing body with a clear temporary control.
Use a reviewer who did not complete the remediation where practical. The reviewer should reproduce the affected path from the current index, not from instructions supplied privately by the person who fixed it. This is especially important for access and signatory problems.
Close temporary controls explicitly. Emergency workarounds can become permanent if nobody records when normal authority was restored. State who withdrew the temporary measure and how affected providers were informed.
Repeat the drill after material change
Run the full exercise annually and a focused retest after a death, incapacity event, family change, appointment, bank migration, trust amendment or restructuring. Update contact details between drills.
The founder-incapacity continuity guide sets the wider scope. The records and investment-data access test covers information readiness. The family-office operating model remains the pillar cornerstone.
An annual family office incapacity drill turns assumptions into tested authority and gives the family a disciplined way to close exceptions. The Family Office and UHNW Advisory hub connects the wider governance library.